How to approach landlord?

6 Replies

Hopefully you guys can help me out with a creative solution.

I currently rent an awesome 2bd/1ba house in a great (but expensive) location. I love this place and would like to own it. My landlord is a very sweet 89 year old woman that lives 3 hours away, but also owns a couple of properties in my area. I say this with all due respect, she certainly shows her age when we talk, as the conversation gets a bit spacey (think great grandmother type). She has two kids that will help out when she's not feeling well or things get to be a bit much for her. When I first moved in, I mentioned I'd potentially like to buy the house, upon which she brushed it by saying she wasn't interested in selling it.

My thought is, I'll ask her again, but I'm guessing she'll have the same response. She's probably very comfortable collecting rent and living an easy life. I'd then reach out to her daughter and ask her, though I'm sure she sees it as a money generating asset, and the family plans to keep renting it out. 

Any thoughts on how to creatively go about this? Lease to own perhaps? 

From a tax perspective, she (and her family) are probably better off not selling it during her lifetime. I'm no accountant, but I'm pretty sure she'd pay a lot of capital gains tax, assuming she has owned it and rented it out for a considerable amount of time now. But (under normal circumstances) when her heirs inherit the house that tax obligation would disappear. And that might make it a very attractive time for them to sell the place. But obviously, that could be quite some time from now and you don't know what else is going on in the family finances.  But it doesn't hurt to gently keep letting them (both the landlord and her kids) know that you are actively interested in buying. When they do start to think about selling you'd be the obvious and easy choice.

The basis is stepped up  when she dies so it is not to her advantage to sell now.  As someone else mentioned you might want to get the option to buy in your lease that will at least clearly spell out your interest.   Acknowledge that  you know she said she did not want to sell but whenever she is ready she you would appreciate if she would talk with you.

Thanks for your help @Jeremy Tillotson  @Jean Bolger  @Colleen F.  . I'm going to reach out to her this weekend and express my interest. Very interesting about the capital gains issue, so I'm sure it'll be awhile before a sale is an option. Perhaps I could lease to own in the mean time. I'll report back what I find out.

you have nothing to lose to ask respectfully once a year or so. You don't want to be annoying but you want them to "think" of you when they decide they want to swell.

That being said, this isn't the best time for them to sell for tax reasons unless they are thinking about 1031 or another tax measure

Originally posted by @Elizabeth Colegrove:

you have nothing to lose to ask respectfully once a year or so. You don't want to be annoying but you want them to "think" of you when they decide they want to swell.

That being said, this isn't the best time for them to sell for tax reasons unless they are thinking about 1031 or another tax measure

 Unless she would buy something else the tax hit will be very hard to overcome.  If you want to live in the place long-term, maybe approach a long lease vs. the ownership angle.  

It would be a good idea for the children to be aware that you have interest in the house since ultimately they most likely will be the ones selling the house.

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